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Market Facilitation Index |
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Market Facilitation Index shows the change of price for one tick. The absolute values of the indicator by themselves mean nothing, have meaning only change indicator.
Bill Williams emphasizes the importance of change indicator and volume.
To add an indicator on the chart of trading terminal MetaTrader 4, choose the menu command "Insert -> Indicators -> Bill Williams -> Market Facilitation Index"
Signals of Market Facilitation Index (BW MFI):
* The simultaneous growth of BW MFI and the volume (Lime Color) suggests that more and more players coming into the market (volume increases), and new players take positions in the direction of the bar.
* The simultaneous drop in BW MFI and volume (SaddleBrown) speaks about lowering interest of participants to the dynamics of this price.
* BW MFI increased, while the volume fell (Blue) - the market does not support such a dynamic price. Changing prices - the result of speculation.
* BW MFI fell as volume increases (Pink)- is a fierce struggle between bulls and bears (the volume increases), but the forces are roughly equal (the indicator has fallen). This bar B. Williams called "curtsying. Usually breakthrough of such a bar is very important in terms of future evolution of prices.
The Market Facilitation index is calculated by the formula:
BW MFI = (HIGH - LOW) / VOLUME
Where:
HIGH - the highest price of the current bar;
LOW - the lowest price of the current bar;
VOLUME - volume of the current bar.
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